Virginia senators have advanced an amended bill to legalize recreational marijuana sales in the Commonwealth toward a floor vote while removing new criminal penalties that were recently added to the measure—setting the stage for negotiations between both chambers of the legislature as they work to enact differing versions of the reform.
At a hearing before the Senate Finance and Appropriations Committee on Thursday, members passed the legislation from Sen. Lashrecse Aird (D) in a 7-5 vote, along with several amendments that were adopted by the panel’s Resources Subcommittee earlier in the day.
This was the last committee stop for the Senate bill, meaning it will next go to the full Senate for consideration at the same time that a House of Delegates version of cannabis sales legalization legislation is set to go to the floor in that chamber.
While both are aimed at giving adults a legal means of buying marijuana, the possession and home cultivation of which was legalized in the state in 2021, there are several substantive differences that will need to be resolved before the reform potentially goes to the governor’s desk.
In the Senate subcommittee on Thursday, members adopted revisions to increase the conversion fee for medical cannabis operators seeking to serve adult consumers to $15 million and to set an overall tax rate of 17 percent for cannabis products.
The new revisions to the Senate bill also propose to make the Cannabis Control Authority a division of the Alcoholic Beverage Control Authority, forming a combined agency that would be called the Alcoholic Beverage and Cannabis Control Authority.
Additional changes add provisions to the bill regarding cannabis business banking, a prohibition on internet sales, product registration, packaging, background checks and the license application period, according to a summary delivered by Aird and committee staff.
The version of the bill that advanced on Thursday also removes new penalties that were previously added to the bill by the Senate Court of Justice Committee.
The latest action came amid pressure from a coalition of advocacy groups that recently sent a letter to senators imploring them to reverse course on those penalty amendments, saying they undermined the “intent” of the legislation and the “will of the people” by adding criminal penalties for certain cannabis-related activity.
The amendments at issue included penalties for consumers who buy from unlicensed sources, the recriminalization of cannabis possession by people under 21 and making sales a class 1 misdemeanor for a first offense and a crime punishable by mandatory jail time for a second offense.
As revised by the prior panel, the bill would have also raised the penalty for unlicensed cultivation to a felony punishable by up to five years in jail and made it a felony to transport with intent to distribute cannabis across state lines.
A separate Senate marijuana sales legalization bill, sponsored by Senate President Pro Tempore Louise Lucas (D), was rolled into Aird’s legislation on Thursday.
Despite some key differences, both chambers’ commercial sales bills largely align with recommendations released in December by the legislature’s Joint Commission to Oversee the Transition of the Commonwealth into a Cannabis Retail Market.
Since legalizing cannabis possession and home cultivation in 2021, Virginia lawmakers have worked to establish a commercial marijuana market—only to have those efforts consistently stalled under former Gov. Glenn Youngkin (R), who twice vetoed measures to enact it that were sent to his desk by the legislature.
Here are the key details of the Virginia marijuana sales legalization legislation, SB 542 and HB 642:
- Adults would be able to purchase up to 2.5 ounces of marijuana in a single transaction, or up to an equivalent amount of other cannabis products as determined by regulators.
- The House bill sets the state date for legal sales as November 1, 2026, while the Senate measure would allow them to begin on January 1, 2027.
- The Senate bill would set an excise tax on cannabis products of 12.875 percent, in addition to a 1.125 percent state sales tax and a mandatory 3 percent local tax. The House measure would apply an excise tax of 6 percent as well as a 5.3 percent retail sales and use tax, while allowing municipalities to set a local tax of up to 3.5 percent.
- Under the House bill, the Virginia Cannabis Control Authority would oversee licensing and regulation of the new industry, while the Senate legislation tasks that to a new combined Alcoholic Beverage and Cannabis Control Authority.
- Tax revenue would be split between the costs of administering and enforcing the state’s marijuana system, a new Cannabis Equity Reinvestment Fund, pre-kindergarten programs, substance use disorder prevention and treatment programs and public health programs such as awareness campaigns designed to prevent drug-impaired driving and discourage underage consumption.
- Local governments could not opt out of allowing marijuana businesses to operate in their area.
- Delivery services would be allowed.
- Serving sizes would be capped at 10 milligrams THC, with no more than 100 mg THC per package.
- Existing medical cannabis operators could enter the adult-use market if they pay a licensing conversion fee that is set at $15 million in the Senate bill and $10 million in the House measure.
- Cannabis businesses would have to establish labor peace agreements with workers.
- A legislative commission would be directed to study adding on-site consumption licenses and microbusiness cannabis event permits that would allow licensees to conduct sales at venues like farmers markets or pop-up locations. It would also investigate the possibility of the Virginia Alcoholic Beverage Control Authority becoming involved in marijuana regulations and enforcement.
Newly sworn-in Gov. Abigail Spanberger (D) supports legalizing adult-use marijuana sales.
Meanwhile, House and Senate lawmakers are also advancing separate legislation to provide resentencing relief for people with prior marijuana convictions.
The legislation would create a process by which people who are incarcerated or on community supervision for certain felony offenses involving the possession, manufacture, selling or distribution of marijuana could receive an automatic hearing to consider modification of their sentences.
The bill applies to people whose convictions or adjudications are for conduct that occurred prior to July 1, 2021, when a state law legalizing personal possession and home cultivation of marijuana went into effect.
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Meanwhile, the Virginia House on Tuesday approved a bill to protect the rights of parents who use marijuana in compliance with state law.
Separately, the Virginia Department of Labor and Industry recently published a new outlining workplace protections for cannabis consumers.
Photo courtesy of Chris Wallis // Side Pocket Images.
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